Legality of signing away windfalls

HGLTsuperstar

This is out of interest only - no comments about carpetbaggers and morals etc please.
Many BS now require new account holders to sign away any potential windfalls for at leeast 5 years etc - fair enough. But if said BS did convert/taken over within that timeframe could the account holder contest this clause.
This dawned on me because Kent Reliance who have one of the best ISA's around (and I myself hold an ISA with them) don't insist on this which made me wonder if they know something the other BS don't.
Are there any cases where someone has made a stand against such a clause.
For the record, I'm also a Nationwide holder so if I were a careptbagger wannabe I'm defo in the wrong account!

opinions4u

If you sign it, I doubt any court would uphold a challenge.

To be honest, as members of Derbyshire and Cheshire found out, the days of carpetbagging making a profit are going to be few and far between in the foreseeable future.

If you were a member of a BS, would you really vote for them to become a bank like Northern Rock, Halifax, Alliance & Leicester, Bradford & Bingley? Dodgy looking list innit!

HGLTsuperstar

Well ex-Lambeth members struck it double with the Portman then Nationwide in quick succession. Dont think Derbyshire and Cheshire are fair examples as they were "rescued" rather than merged or bought out.
I just found it striking that KRBS seem to be bucking a trend and wondered if there was a specific reason.

Milarky

HGLTsuperstar wrote: »

Well ex-Lambeth members struck it double with the Portman then Nationwide in quick succession.

Sore point! I had a matured Lambeth bond in 2005 and took it out - thereby missing out on the 'double'. Then Nationwide announced its (erm!) 'merger' with Portman and nothing for NW members (on the technicality that NW was more then 5 times the size of Portman - so they used - 'abused' I would say - the rules simply to avoid paying their own members any kind of bonus) That set me off opening BS accounts with a vengence - I am a carpetbagger courtesy of Phillip Williamson's scorn for his own organisation.

But back to the above point - 'mergers' are not subject to signaway provisions - because signaways only apply to 'loss' of membership rights - and you strictly retain you membership rights - albeit as a member of a larger entity - whenever a merger is proposed.

The 'carpetbagger' here is the large 'mutual' organisation which procures a 'merger' with a smaller rival which is less than 5 times its size - thus obviating seeking its own member approval and the possibility of a bonus to its own members.

With Derbyshire and Cheshire, however, because a new way was found of having a 'ballotless' merger - no bonus was paid to smaller society members either.

But all signaway customers remain eligble to a 'merger-bonus' payout. They can be a member for a week or for fifteen years as long as they had £100 in an account on a particular date.....

HTH

Oblivion

HGLTsuperstar wrote: »

This is out of interest only - no comments about carpetbaggers and morals etc please.
Many BS now require new account holders to sign away any potential windfalls for at leeast 5 years etc - fair enough. But if said BS did convert/taken over within that timeframe could the account holder contest this clause.

Clearly an account holder cannot 'contest this clause'. When you set up a savings account and deposit money into it, you have entered into a contract with the BS or Bank and must abide by the terms and conditions specified.

Just because another BS or Bank has decided to do things differently, does not absolve you from the contract you made with your chosen provider.

Dave.

HGLTsuperstar

Milarky wrote: »

But all signaway customers remain eligble to a 'merger-bonus' payout. They can be a member for a week or for fifteen years as long as they had £100 in an account on a particular date.....

HTH

Clearly an account holder cannot 'contest this clause'. When you set up a savings account and deposit money into it, you have entered into a contract with the BS or Bank and must abide by the terms and conditions specified.

Just because another BS or Bank has decided to do things differently, does not absolve you from the contract you made with your chosen provider.


OK now I'm really getting confused - one of you says one thing and one says another...

Milarky

HGLTsuperstar wrote: »

OK now I'm really getting confused - one of you says one thing and one says another...

Not really. Was commenting on a different aspect - re. your second post. On your narrow, point opinions4u and Oblivion are quite correct - the legality of the signaway is quite 'strong' - simply because anyone affected after a certain date will have joined a mutual under new agreed terms.

In the case of Lambeth/Portman 'double' the signaway question never arose because these where 'mergers' not change-of-status from a mutual. A mutual can shed its status either by 'flotation' on the stock market (and issue free shares to its members) OR by a straightforward sale to a non mutual business (e.g Chelteham and Gloucester Building Society was bought by Lloyds TSB and members were paid a cash bonus)

No wonder it's confusing! But that's partly what the boards of building societies want it to be. It was Brian Davies at Nationwide (I think) who (inaccurately) applied the American Civil War term 'carpetbagger' to members - both existing and recent of Nationwide. That's really the B/Soc equivalent of Gerald Ratner's imfamous comment - yet old BD got nice golden handshake shortly afterwards. We should be called 'speculators' to be accurate....

Oblivion

Milarky wrote: »

We should be called 'speculators' to be accurate....

Quite right and proper too

Dave.

cvd

We should be called 'speculators' to be accurate....

Absolute rubbish.
From the Concise Oxford Dictionary for speculate: "make investment that involves risk of loss"

Carpoetbaggers have absolutely no morality - they expect something for NOTHING. They are risking NOTHING. It is true that capetbaggers have caused no demutualisation - they have all been caused by greedy directors who made large amounts of money which they achieved by bribing gullible and greedy members with small amounts of money.

However, this does not change the fact that (1) the building society movement has been irreparably damaged by demutualisations (2)members who want the democratic accountability of the movement to be strenthened find this is impossible because some sensible initiatives would almost certainly be highjacked by carpetbaggers.

I live in a place with a strong local building society - there is absolutely no doubt that it is a force for good in the community in a way that no PLC here has ever been. Yet you would be quite pleased if it disappeared.

Short selling of financial institutions is currently banned - but short sellers do risk making a loss. Carpetbaggers are taking NO risk and expect something for nothing which is at the expense of oihers.

isofa

cvd might be a newbie, but he speaks a lot of sense!